Budgets And Financial Management In Higher Essay

Question:

Discuss about the Budgets and financial management in higher.

Answer:

Preparing budget for Ned Kelly’s Newsagents for the period 1st January, 2014 until 30th June, 2014:

Particulars

Jan

Feb

Mar

Apr

May

Jun

Total

Sales

24,675

26,250

28,875

27,300

29,610

30,765

167,475

Cost of sales

Fairfax News

3,344

3,553

3,658

3,344

3,762

3,971

21,632

Newscorp

3,502

3,708

3,811

3,605

3,708

3,811

22,145

Stationary w/Sale

2,400

2,200

2,000

2,100

2,200

2,450

13,350

Cadbury

764

784

833

813

853

902

4,949

Expenses

Depreciation

400

400

400

400

400

400

2,400

Rent

1,935

1,935

1,935

1,935

1,935

1,935

11,610

Light & Power

715

715

715

715

715

715

4,290

Petrol

120

120

120

120

120

120

720

Phone

340

340

340

340

340

340

2,040

Salaries

7,175

7,175

7,175

7,175

7,175

7,175

43,050

Depicting what could be conducted to reduce rent cost:

The decline in rent can only be conducted by the company, where extension of the lease agreement could be conducted. This would eventually allow the company to negotiate and reduce rent, while declining the expenses (Bailey, 2018).

Reflecting the budget with reduced rent:

Particulars

Jan

Feb

Mar

Apr

May

Jun

Total

Sales

24,675

26,250

28,875

27,300

29,610

30,765

167,475

Cost of sales

Fairfax News

3,344

3,553

3,658

3,344

3,762

3,971

21,632

Newscorp

3,502

3,708

3,811

3,605

3,708

3,811

22,145

Stationary w/Sale

2,400

2,200

2,000

2,100

2,200

2,450

13,350

Cadbury

764

784

833

813

853

902

4,949

Expenses

Depreciation

400

400

400

400

400

400

2,400

Rent

1,890

1,890

1,890

1,890

1,890

1,890

11,340

Light & Power

715

715

715

715

715

715

4,290

Petrol

120

120

120

120

120

120

720

Phone

340

340

340

340

340

340

2,040

Salaries

7,175

7,175

7,175

7,175

7,175

7,175

43,050

Responding to the question regarding small amount of petrol budget:

The small portion of petrol budget is conducted due to the low usage and need of fuel within the production function. In addition, maximum of the production needs is fulfilled with the lightening and power, which is relatively accommodated in the budget. This is the main reason behind the increment in value of electricity and constant value of petrol in budget (Barr & McClellan, 2018).

Depicting the reason for the deviance:

The main reason behind the deviance for cost is the rising raw material price and other variable cost needed to complete the production function.

Depicting the reason behind measures to address the deviance:

Contacting other suppliers might help in getting competitive prices from the market, which in turn could help in reducing the overall cost of Cadbury.

Reference and Bibliography:

Bailey, D. (2018). The NHS Budget Holder's Survival Guide. CRC Press.

Barr, M. J., & McClellan, G. S. (2018). Budgets and financial management in higher education. John Wiley & Sons.

Finkler, S. A., Smith, D. L., Calabrese, T. D., & Purtell, R. M. (2016). Financial management for public, health, and not-for-profit organizations. CQ Press.

Klychova, G. S., Faskhutdinova, ?. S., & Sadrieva, E. R. (2014). Budget efficiency for cost control purposes in management accounting system. Mediterranean journal of social sciences, 5(24), 79.

Lopez-Valeiras, E., Gomez-Conde, J., & Naranjo-Gil, D. (2015). Sustainable innovation, management accounting and control systems, and international performance. Sustainability, 7(3), 3479-3492.

Stevenson, W. J., & Sum, C. C. (2015). Operations management. New York: McGraw-Hill Education.

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